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What Is Branding?
As the American Marketing Association defines it:
“A brand is a name, term, design, symbol or any other feature that identifies one seller’s good or service as distinct from those of other sellers.”
Water is a simple product, yet these brands have all managed to differentiate themselves from each other:
Why would you choose Evian over Perrier, or Fiji over Voss? That depends on your needs (simply rehydrate or enjoy a refreshing treat) and your perception. Therefore, the thoughts, feelings and associations that consumers make when they think of your product is the result of your branding. Only when your product or service is seen as unique can you then start to build on that understanding and see a return on investment.
However, branding is more than just slapping a logo onto your business. In order to affect your ROI, your business needs a “brand persona”.
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What Is a Brand Persona?
Back when I was an intern in my first strategy session, our client made a really confusing comment right before the presentation that’s stuck with me to this day: “I’m open to any ideas as long as they're good ideas.”
Not until I learned about the concept of brand personas did that comment finally made sense to me. Essentially, our client was saying that he was open to any ideas that made sense for his brand. In other words, he was receptive to hearing any suggestions that were congruent with the tone, style and audience of his business. This is key because although logos, colors and cool words won't make you money, they can help people better understand your brand persona, which leads to ROI down the line:
A brand persona is exactly what it sounds like – the personality of your brand. Just as many people tend to resonate with certain influencers and celebrity personalities, your brand can also benefit from having a relatable personality.
Why is this important? Imagine that there are two guys who are both caught doing drugs at a party. No big deal right? Just two guys enjoying themselves. However, what if one guy was a rapper and the other guy was a priest? All of a sudden, our feelings toward each person may change. Most people probably wouldn’t care or might even approve of a rapper taking drugs at a party. On the other hand, most people probably would abhor the idea of a priest partaking in the same act.
Why would most people be appalled at the priest and not the rapper? Because there's a lack of congruence between how the priest presents himself and his actions. As outlandish as this example may seem, businesses are conveying a similar lack of congruence to their markets all the time. Anyone remember the Gucci blackface sweater fiasco earlier this year?:
Think that would have made news if it came from an alt right clothing brand? No, because the lack of congruence is what people were outraged by.
One of the great things about having a brand persona is that it can guide you in what ideas make sense for brand, guide how you communicate with your audience, and guide the overall style of how your company does things. Once your brand has a persona, you'll no longer have to guess what marketing ideas, tone and messaging makes sense for you.
Eventually, as your brand grows, you’ll be able to charge a higher price point for products as you differentiate yourself from the competition, which ultimately leads to better ROI.
How Brand Personas Can Lead to Effective ROI
1) Separate Your Product/Service from Commodities
The first way that a brand persona can lead to a more effective ROI is by separating your product/service from being seen as a commodity, which, simply defined, is a product that can be bought and sold.
As a commodity, your products are much more susceptible to price elasticity and the laws of supply and demand in the market. Since your product is seen as virtually the same as the next one, you can easily be undercut and lose customers to your competition. Starbucks is a great example of turning a commodity (coffee) into a branded product (Cinnamon Roll Frappuccino® Blended Coffee):
However, products attached to a strong brand have been known to command a higher price point because of their perceived quality and uniqueness. Another reason you can charge more is because your brand has intangible values that are easily recognizable to consumers. By having a strong brand, consumers inherently know that buying your products will raise their status because your brand's reputation will be associated with them.
For instance, basketball players wearing Nike will be seen as more serious and competitive than someone wearing a generic brand of basketball shoes. The ability to convey your brand value quickly provides a certain level of trust and safety when shopping, which allows consumers to save time knowing that they are making the right decision.
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2) Nurture Loyal Followings and Communities
The second reason why a brand persona can raise ROI is because it can lead to the formation of loyal followings and communities.
Oftentimes, society can be filled with many paradoxes. For instance, we as individuals seem to be constantly looking for ways to stand out from the crowd, while simultaneously looking to associate with people who are just like us. This need to associate with people whom we feel resonate most with us helps create a bond and loyalty to certain brands. In fact, 90% of customers report being brand loyal:
In business, the cost of acquiring a customer is one of the most important metrics in determining whether or not a business can be successful in the long term. In fact, there’s a classic marketing principle that says whoever can afford to pay the most for a customer wins. With that being said, many businesses focus on acquiring customers as efficiently as possible.
However, if the cost of acquiring a customers continues to go up within an industry, the worth of repeat customers becomes more and more valuable. Therefore, having an established persona that resonates with consumers and quickly distinguishes you from the competition can lead to the growth of a following.
3) Carve Out a Chunk of Market Share
The third reason why having a brand personality is good for ROI is because it helps you carve out a chunk of market share in your industry.
Often, companies will try to build similar brands as those that have already been established in the industry, and then try to compete by improving their product quality. An example of this would be shoe companies trying to compete with Nike by saying that their shoes allow athletes to jump higher and run faster, or a cola company saying that their soda tastes better than Coca Cola. Since most industries have some established successful players already, many competitors tend to think that copying that approach will allow them to be successful.
However, in the book The 22 Immutable Laws of Marketing: Violate Them at Your Own Risk, the concept of brand perception is presented:
Essentially, it’s the idea of market share from a psychological standpoint in the minds of consumers. So instead of thinking of market share as the amount of sales that a brand can get, it’s seen as a percentage of recognizability within the market. That means once a certain level of perception has been established in the minds of consumers, it’s usually futile to try to convince them differently.
In fact, it's actually more effective to present yourself as the opposite of the established brand. That means if the dominant brand in an industry is presenting themselves similarly to Coke, which promotes simplicity, wholesomeness and a fun lifestyle, it’s better to present yourself similarly to Pepsi, which has a more fun-loving, rebellious and comedic style.
In any market, just as in life, no one personality can win over the entire market. By definition of being polarizing, people will either love you or hate you. Therefore, every brand personality will have a segment of people who don't resonate with it. If you can recognize that gap and fill it, your brand can take control of that market share. However, this can only be done if you have a brand personality that fills that need in the marketplace.
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Conclusion: How Can You Develop Your Own Brand Persona?
Whether you recognize it or not, your company most likely already has a brand persona. Once you consider what your values, tone, audience and product are, a natural vibe starts to appear. In order to further solidify that vibe into a foundational brand persona that resonates with consumers throughout the years, take this brand persona test to see which persona is best for you.
Once you have an understanding of your brand, then you can start to improve ROI by building a following with a tone and messaging that's congruent with your audience, create a sense of uniqueness to separate yourself from mere commodities, and eventually dominate the market share that is being underserved by your competitors.